In the competitive field of medical equipment sales, the task of chasing down overdue accounts is crucial for maintaining a healthy cash flow and ensuring the financial stability of the company. This article explores a comprehensive recovery system for company funds and discusses the rates for debt collection in the context of medical equipment sales. By understanding the phases of the recovery system and the rates for debt collection, companies can effectively navigate the challenges of overdue accounts and optimize their revenue collection process.
Key Takeaways
- Implementing a structured recovery system is essential for efficiently chasing down overdue accounts in medical equipment sales.
- Consider the two possible recommendations in Phase Three: closure of the case if recovery is unlikely or proceeding with litigation with associated legal costs.
- Rates for debt collection vary based on the number of claims and the age of the accounts, with different percentages for accounts under 1 year, over 1 year, under $1000.00, and those placed with an attorney.
- Phase One of the recovery system involves initial contact with debtors, skip-tracing, and attempts to resolve the matter through various communication channels.
- Phase Two includes forwarding the case to affiliated attorneys for legal action if initial attempts to resolve the account fail.
Recovery System for Company Funds
Phase One
Within the first 24 hours of initiating Phase One, a multi-pronged approach is set into motion to recover overdue accounts. Immediate action is taken to ensure the debtor is aware of their obligations:
- A series of four letters is dispatched via US Mail.
- Comprehensive skip-tracing and investigations are conducted to secure optimal financial and contact data.
- Persistent contact efforts are made through phone calls, emails, text messages, and faxes.
Daily attempts to engage with debtors span the initial 30 to 60 days, aiming for a swift resolution. In the event of non-compliance, the process seamlessly transitions to Phase Two, involving our network of affiliated attorneys.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network, initiating a more formal approach to debt recovery. Here’s what happens next:
- A series of official letters are drafted and sent by the attorney, demanding payment.
- Concurrently, the attorney’s office begins persistent telephone outreach to the debtor.
If these intensified efforts do not yield results, a detailed report is prepared for the client, outlining the challenges encountered and suggesting viable next steps.
This phase is critical as it represents the transition from in-house collection efforts to legal enforcement, a move that often prompts debtors to settle their accounts to avoid further legal action.
Phase Three
Upon reaching Phase Three, the path forward hinges on the feasibility of recovery. If prospects are dim, we advise case closure, incurring no cost to you. Conversely, should litigation seem viable, a choice presents itself.
- If litigation is declined, you may retract the claim at no charge, or opt for continued standard collection efforts.
- Choosing litigation necessitates upfront legal fees, typically between $600 to $700, based on the debtor’s location.
Upon initiating legal action, all owed monies are pursued, including filing costs. Failure to collect post-litigation results in case closure, absolving you of further financial obligation.
Our rates are competitive, scaling with the number of claims. For instance, accounts under a year old are charged at 30% of the amount collected for 1-9 claims, and 27% for 10 or more. The full rate structure is detailed under the ‘Rates for Debt Collection’ section.
Rates for Debt Collection
Rates for 1 through 9 Claims
When it comes to recovering funds from overdue accounts, understanding the rates for debt collection is crucial. For those submitting between one and nine claims, the rates are structured to incentivize swift recovery while accommodating the age and size of the account.
Accounts under one year old are subject to a 30% fee on the amount collected. This rate encourages prompt action and reflects the higher likelihood of recovery for newer debts. For accounts over one year old, the fee increases to 40%, acknowledging the additional effort often required to chase down these more entrenched debts.
Smaller accounts, specifically those under $1000.00, incur a 50% fee. This higher rate is due to the proportionate cost of recovery efforts relative to the debt size. Similarly, accounts that necessitate legal intervention are also charged at a 50% rate, reflecting the complexity and resources involved.
The fee structure is designed to align the interests of the medical equipment sales company with the collection agency, ensuring that both parties are motivated to recover the maximum amount possible.
Here’s a quick breakdown of the rates:
| Account Age/Type | Collection Fee |
|---|---|
| Under 1 year | 30% |
| Over 1 year | 40% |
| Under $1000 | 50% |
| Legal action | 50% |
Remember, these rates apply only to the first nine claims. Larger batches of claims may benefit from reduced rates, as economies of scale come into play.
Rates for 10 or More Claims
When handling a volume of 10 or more claims, economies of scale come into play, allowing for more favorable rates. Bulk submissions not only streamline the recovery process but also reduce the percentage owed upon successful collection. The larger the batch, the lighter the burden on your budget.
| Age of Account | Rate of Collection |
|---|---|
| Under 1 year | 27% |
| Over 1 year | 35% |
| Under $1000 | 40% |
| Legal action | 50% |
It’s crucial to understand that while rates are reduced, the commitment to recovering your funds remains unwavering. The approach is tailored to ensure maximum efficiency without compromising on service quality.
Remember, the goal is to recover what’s owed to you with minimal additional expenditure. These adjusted rates for bulk claims reflect our dedication to providing cost-effective solutions for our clients.
Frequently Asked Questions
What is the Recovery System for Company Funds?
The Recovery System for Company Funds involves a 3-phase process to recover company funds. Phase One includes sending letters to debtors, skip-tracing, and contact attempts. Phase Two involves forwarding the case to affiliated attorneys. Phase Three includes recommendations for closure or litigation.
What are the rates for debt collection for 1 through 9 claims?
For 1 through 9 claims, the rates vary based on the age of the accounts and the amount collected. Rates range from 30% to 50% of the collected amount, depending on the specific details of the account.
What are the rates for debt collection for 10 or more claims?
For 10 or more claims, the rates also vary based on the age of the accounts and the amount collected. Rates range from 27% to 50% of the collected amount, depending on the specific details of the account.
What happens if the possibility of recovery is not likely in Phase Three?
If the possibility of recovery is not likely in Phase Three, the case may be recommended for closure. In such cases, there will be no fees owed to the firm or affiliated attorney.
What are the upfront legal costs if litigation is recommended in Phase Three?
If litigation is recommended in Phase Three, upfront legal costs such as court fees and filing fees will be required. These costs typically range from $600.00 to $700.00, depending on the debtor’s jurisdiction.
What are the options if legal action is decided in Phase Three?
If legal action is decided in Phase Three, the client can choose to proceed with legal action by paying the upfront legal costs or withdraw the claim. If litigation fails, there will be no fees owed to the firm or affiliated attorney.
